Gateway (GTW) rejected an unsolicited bid to take over its retail operations, saying John Hui's $450 million offer "is not in the best interest of shareholders."
The Irvine, Calif.-based PC maker
fielded Hui's bid a week ago and pledged to review it.
Hui, the former owner of Gateway's eMachines unit, said he believed the company needs to split off its retail operations. Hui also offered to bid for the whole company and oversee the split-off himself if that was deemed necessary.
But on Friday, Gateway said its board, "after careful consideration and in consultation with its financial and legal advisers," would pursue other means of enhancing shareholder value.
Gateway shares surged 16% last Wednesday on news of the bid. Shares fell a nickel Friday to $1.95.